Sonoma County’s economy is healthy for now, expert says

Sonoma County and the nation will enjoy continued economic growth this year, but high housing costs and a lack of available workers here threaten future prosperity, an economist told civic and business leaders Friday.

Moody’s Analytics economist Steven Cochrane said the two challenges will remain as the workforce gets older and fewer people move into the county.

“It will be increasingly difficult to find that labor you’re looking for,” said Cochrane, the managing director for the research firm in West Chester, Pennsylvania.

Cochrane spoke Friday at an annual breakfast hosted by the Sonoma County Economic Development Board. The event was held at the DoubleTree Hotel in Rohnert Park.

At the breakfast, three local business leaders labeled the lack of available workers a looming crisis in such areas as construction and manufacturing. As a response, educators and volunteers are teaching high school students basic construction skills. Others are offering hands-on training in design and manufacturing techniques taken from the do-it-yourself enthusiasts who belong to the maker movement.

The three speakers urged the community to get involved in preparing a new generation of workers and entrepreneurs who aren’t bound for four-year colleges. Pat Harper, a vice president at Keysight Technologies in Santa Rosa, said he recognizes the need because most of the 600 workers in his local manufacturing division will soon be eligible for retirement.

“We’ve got about five years to solve this problem,” Harper said.

On Friday, the Commerce Department reported the nation’s gross domestic product grew at a meager 0.7 percent in the first quarter, the weakest performance in three years. Cochrane downplayed the number’s significance and later said that Moody’s is forecasting GDP growth of about ?2 percent this year. He expected the county would enjoy slightly higher growth than that.

“The economy is doing well,” Cochrane told the audience, which filled the hotel’s main ballroom. “We’ve got a little ways to go in this business cycle.”

Across the U.S., job openings have reached a record high, he said. The demand for workers is driving wage growth, which in Sonoma County is increasing “at its fastest rate in quite some time.”

“This means consumer spending ought to be strong,” Cochrane said.

But workers are hard to find. The county unemployment rate dipped to 3.6 percent in March, a level Cochrane expects will fall further in coming months.

And employers must prepare to replace older workers. County economic officials on Friday estimated that 50,000 employees, roughly a quarter of the county workforce, will retire over the next decade.

Migration into the county remains relatively low, partly due to the high cost of housing. Cochrane noted that housing prices here have long been less affordable than for most of the U.S. Looking forward, he said, “it probably will just get worse.”

You can reach Staff Writer Robert Digitale at 707-521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit.